Adobe will acquire the design software company Figma in a deal valued at approximately $20 billion in cash and stock.
Adobe offers a variety of services, including Photoshop, Illustrator, Premiere Pro, and After Effects suites of software, to the professional photography and videography communities.
Figma has been in business since 2012 and develops real-time cloud-based design software for teams. Its main competitor is Adobe’s XD software.
This year, recurring revenue for Figma is projected to exceed $400 million.
The sales multiple for cloud software has been falling dramatically from last year’s all-time highs, but Adobe is still paying close to 50 times revenue.
Adobe has indicated that it intends to incorporate some of the capabilities found in its other products, such as illustration, photography, and video technology, into the Figma platform.
According to Adobe CEO Shantanu Narayen, “Adobe’s greatness has been rooted in our ability to create new categories and deliver cutting-edge technologies through organic innovation and inorganic acquisitions.” It’s a game-changer to have Adobe and Figma working together; it’ll help us achieve our goal of collaborative creativity much faster.
After the deal is finalized, Figma will still be led by co-founder and current CEO Dylan Field.
Dylan will report to Adobe’s digital media business president, David Wadhwani.
When Figma raised money in 2021, the valuation was $10 billion.
Adobe stock fell 17% following the announcement, its biggest drop since 2010.
Read more on Tech Gist Africa:
Microsoft will buy Activision Blizzard in a deal worth $68.7 billion
JD Logistics to buy rival Deppon for $1.4 billion
Paypal is in talks to buy Pinterest for $45 billion, according to reports